11/10/2017 | 1 MINUTE READ

North American Automotive Vendor Tooling Spending Projected at 11 Billion in 2018

Facebook Share Icon LinkedIn Share Icon Twitter Share Icon Share by EMail icon Print Icon

Harbor Results Inc. says that a high level of anticipated vehicle launches from 2018–2020 will drive that spending.

Harbour Results, Inc. (HRI) recently released the results of its in-depth study on the current state of the automotive vendor tooling industry. The analysis predicts 2018 automotive vendor tooling spend to reach a record high of $11 billion. The key factor driving increased tooling spend is the high level of North American vehicle launches that are predicted between 2018 and 2020. Specifically, as many as 177 vehicle launces are anticipated between 2018 and 2020. Additionally, 66 percent of these launches are sport utility vehicles (SUVs) and truck platforms, which require more tooling to manufacturer than a car platform.

Harbor Results estimates approximately $9 billion in tooling spend, and the company believes that shops are at high capacity as an outcome. It reports that mold shops, in particular, are at 81-percent capacity, and die shops at 88-percent capacity. The company also says that $1–1.5 billion of tooling was outsourced this year in an effort to manage the demand, and it anticipates that the amount of outsourcing will increase in 2018. However, Harbor Results projects a drop of 40 percent in tooling spend from an estimated high point of $11 billion in 2018 to about $6.7 billion in 2020.

In addition to examining tooling launches, Harbor Results considers a variety of factors that influence the automotive industry. For example, they examine the elimination of vehicle models, new foreign-owned plants and products, changes in the consumer landscape, the state of politics and economics and profitability of original equipment manufacturers. The company forecasts $50 billion in vendor tooling spend from 2016–2021. It anticipates that the lowest spend year will be 2020.

HRI’s research also uncovered that there is a threshold for any given year of $9–10 billion in tooling spend. According to Harbour Results Inc., the North American automotive industry struggles to achieve spend beyond this threshold due to a number of factors primarily found across the original equipment manufacturers and Tier 1s.

Harbor Results conducts this study annually to assist the automotive tooling industry in developing short- and long-term business plans. It says that while the projected dip is not as severe as the industry has experienced in the past, tool companies should prepare accordingly with investment and operational improvements so that they can weather the dip and remain competitive.



Thanks for considering a subscription to MoldMaking Technology. We’re sorry to see you go, but if you change your mind, we’d still love to have you as a reader. Just click here.